Mechanical ventilation (MV) is one of the lynchpins of modern intensive-care medicine and is life saving in many critically ill patients. Continuous ventilator support, however, results in ventilation-induced diaphragm dysfunction (VIDD) that likely prolongs patients' need for MV and thereby leads to major associated complications and avoidable intensive care unit (ICU) deaths. Oxidative stress is a key pathogenic event in the development of VIDD, but its regulation remains largely undefined. We report here that the JAK-STAT pathway is activated in MV in the human diaphragm, as evidenced by significantly increased phosphorylation of JAK and STAT. Blockage of the JAK-STAT pathway by a JAK inhibitor in a rat MV model prevents diaphragm muscle contractile dysfunction (by ~85%, p < 0.01). We further demonstrate that activated STAT3 compromises mitochondrial function and induces oxidative stress in vivo, and, interestingly, that oxidative stress also activates JAK-STAT. Inhibition of JAK-STAT prevents oxidative stress-induced protein oxidation and polyubiquitination and recovers mitochondrial function in cultured muscle cells. Therefore, in ventilated diaphragm muscle, activation of JAK-STAT is critical in regulating oxidative stress and is thereby central to the downstream pathogenesis of clinical VIDD. These findings establish the molecular basis for the therapeutic promise of JAK-STAT inhibitors in ventilated ICU patients.